Bitcoin Needs to Break Down Below $6,500 Over the Next Few Months to Turn ‘Super Bullish’
Ever since Bitcoin hit $9,200 on the weekend, Bitcoin has been hovering around $8,600. Yesterday, BTC dropped just below $8,500 to get back up to $8,600. Today, we surged about $8,900 level before going back up again to $8,600.
At the time of writing, BTC/USD has been trading at $8,640 with 24 hours gains of 0.02%, as per Coincodex while managing the daily trading volume of $670 million.
Bitcoin has been trading in a clear range of $8,500 to $8,750 on lower time frames. But as long as we stay below high of the day, TraderSZ sees a correction towards $8,300.
Bearish Calls Permeate the market
The world’s leading cryptocurrency is currently up 19.10% YTD, which has turned investors bullish but several industry commentators are still very much bearish.
I like being short here on $BTC into that double bottom at 8450
— Nik Patel (@cointradernik) January 22, 2020
Popular trader Majin points out the changes in volatility and how this means, BTC is going back below $8,650.
“Next it crumbles back down and then the bear market starts. This was the final bounce of the demand zone,” said Majin.
Noticed volaility. 2.2 % down from point of control, then 1.5% up from point of control. a 2.2% up would imply reaching the top-dump day vwap, which aint happening. This scam is most likely returning to poc @ 8640 pic.twitter.com/a8Dj4ae0Y1
— Majin (@majinsayan) January 21, 2020
TraderXO echoes similar sentiments stating, “My bearish stance has been quite obvious over the last several months.”
In December 2019, the Bitcoin price dropped to $6,400, a level that was last seen in May last year. But the trader is expecting another drop below even this level in order to turn bullish. Only if BTC breaks down to the lows of $5,000 to $6,500 over the next few months, TraderXO says he will genuinely become “super bullish.”
Expecting such a drop isn’t that surprising as veteran trader Peter Brandt called out for $5,400 in June, a month after the Bitcoin reward halving in May 2020. Analyst Jacob Canfield has also called out for $4,888 around that time.
Bears shall be chopped up, weak hands will be shook and then when it is too late, we shall pump into oblivion. $btc
— fil₿fil₿ (@filbfilb) January 21, 2020
A Healthy Dose of Bulls
In the short term, Bitcoin price is bound to move up and down but for holders, it’s hardly a matter of concern. As cryptographer Nick Szabo notes,
“Successful Bitcoin holders have a low time preference & judge over extended periods, e.g. risk-adjusted return over 4-year holding periods.”
For the long term, historically a weekly close above the 0.65 Fibonacci will send BTC into a parabola run meaning a weekly close above $14,200 would be when Bitcoin will surge above $75,000.
History tells us that a weekly close above the 0.65 fibonacci will send BTC into a new parabolic bull run.
The 0.236 fib has often acted as a bottom and the 4.23 fib has been exceeded each time.
This means a weekly close above $14,200 would see BTC reach over $75,000. pic.twitter.com/gBmUxx3nE7
— NebraskanGooner📈 (@nebraskangooner) January 20, 2020
However, people like Ray Dalio, founder of Bridgewater Associates still don't see Bitcoin as a medium of exchange or store hold of wealth.